Replacement cost is defined as the cost to construct:

Replacement cost is defined as the cost to

Multiple choice — select the best answer

AThe exact same building with identical obsolete materials
BA building of equal utility using modern materials, design, and construction standards
CThe cheapest building that can be built on the site
DA replica building for insurance purposes only

✓ Correct answer: B. A building of equal utility using modern materials, design, and construction standards Replacement cost is the cost to build a building of equal utility using current materials, methods, and standards — not an exact replica. This is the most commonly used cost basis in appraisal.

.q-expl{display:block!important}.q-opt[data-idx="1"]{border-color:#16a34a;background:#f0fdf4}.q-opt[data-idx="1"] .oltr{background:#16a34a;color:#fff}.q-opt{cursor:default!important;pointer-events:none}

Keep practising. Use the free Real Estate Appraiser PDF, watch the YouTube walkthrough, or unlock all 10 web questions with timed mock exams.

Free PDF Video walkthrough

Topic: Cost Approach

← Previous Next → 🎲 Random question ↩ Back to all questions

Keep practising

Replacement cost is defined as the cost to construct:

Related questions — Cost Approach

Free practice here. Timed mocks when you are ready.